Howzat for fair dealing? Fanatix left stumped by copyright infringement

A consideration of the legal implications and those for the sports media industry of a recent, successful copyright infringement claim by the ECB and Sky regarding an app use to upload and share sporting clips.

The Fanatix app, which is similar to the Vine app, allowed users to add commentary and then share footage. The shared content featured Fanatix branding and adverts. There were restrictions on use and the source of pictures had to be referenced accordingly.

The Copyright, Design and Patents Act 1988 (CDPA), provides that copyrighted material is unlawfully communicated to the public if a broadcast is made available without rights holders' permission via an "electronic transmission" and it is accessible by the public "from a place and at a time individually chosen by them". This general restriction does allow for minor infringements under s.16(3) CDPA; if unauthorised use doesn't involve the whole or a 'substantial part' of the copyright work. For broadcasts, the quality and quantity of copied content must be assessed when determining if it constitutes a 'substantial part'.

Justice Arnold considered some moments from matches (i.e. wickets or reviews in cricket) as more interesting to viewers. Correspondingly, unauthorised distribution of those clips may unfairly exploit investment broadcasters (like Sky) have made in filming and editing matches. Whilst 8 seconds may not quantitatively be a large proportion of a broadcast taken from an all day event (like a test match), qualitatively the clips being uploaded would be highlights considered points of interest in matches and, therefore, of value. Each clip substantially exploited Sky's investment in the relevant broadcast. Justice Arnold found that each clip constituted a substantial part of the relevant copyright work(s)."

The case went on to consider whether the use of the copyright material was protected by the fair dealing defence in s.30(2) CDPA, as Fanatix argued. One of the 3 permitted exceptions to using copyright material is for "reporting current events", a phrase which should be interpreted liberally. This right is qualified in that the use of material in news reports is 'fair dealing'. Using the material is generally restricted to using a reasonable and appropriate amount, which varies from case to case.

Commentary from the court

The court provided interesting comments on the meaning of reporting. It was noted that it was not just "near live" sporting clips that were uploaded, old events could be uploaded too. The defendants ultimately failed on their argument that the actual purpose of the app was for the reporting of current events. The court reiterated the principle that ‘reporting’ should be given a broad interpretation and should not be limited to traditional news reporting. It went on to state that if a newsworthy event is captured on a smartphone, and uploaded to social media, this could constitute reporting a current event, even if there is little in the way of commentary in accompaniment.

Further, it was held that Fanatix was pursuing a purely commercial objective and that its service was not "genuinely informatory", so the exception for reporting current events could not apply. The clips were not being added to the app or website to produce a report, to facilitate debate about sporting events, nor to inform the audience about a current event, but were presented for consumption due to their intrinsic interest and value. The defendants' objective, therefore, had been purely commercial rather than genuinely informatory. Furthermore, the use was "commercially damaging" to both Sky and the ECB, conflicting with normal exploitation of copyright works.

Clarity for sports rights holders and helpful guidance

This case provides much needed clarity for sports rights holders and the legal sector. It creates certainty regarding infringement of copyright for rights holders and broadcasters, important as revenue from exclusive broadcasting deals is often a main stream on income. This should be caveated by the fact that, typically, infringers will be individuals uploading clips on to social media, not companies creating an app with the primary purpose of providing platforms for mass reproduction of historic sports clips.

Similar services may take a step back to being a mere conduit (an unsuccessful argument in this case) and will seek to avoid being the primary infringer, by neither uploading content themselves nor monitoring users’ uploads. Terms and conditions could be used to pass on the burden for obtaining correct copyright clearances. Would we see takedown notices considering each potentially infringing clip on a case-by-case basis? Alternatively, services may offer impermanent upload of media that disappears, once viewed (i.e. like the Snapchat app).

The judgment provides helpful guidance on when the fair dealing defence may be successfully used. Whilst the expression itself is wide and of indefinite scope, the right to rely on the exception for using copyright material without the rights holders permission for "reporting current events" must be reasonable and appropriate, and will vary from case to case. Most of clips shown on the app were of something of interest, and, therefore, value. The clips "substantially exploited" the claimants' investment in producing broadcasts and constituted a substantial part of the relevant copyright works.

It is long established law that it is impossible to lay down any hard-and-fast definition of what fair dealing actually is, as it will always depend on facts of each case. The most important factor, as crucial in this case, is whether the alleged fair dealing is commercially competing with the proprietor's exploitation of the copyright work and a substitute for the probable purchase of authorised copies.

It seems likely this approach will extend not just to sporting apps and websites, but others that similarly allow users to upload, post and share copyrighted content without permission on the owner. If you operate a company that has an app or a website that it actually pursuing a purely commercial objective and not one that is genuinely informative, you will be unlikely to successfully rely on the copyright exception.

If you have any questions or would like more information, please contact one of our sports law specialists below.

Author: Nicola Kemp

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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Paul Pignatelli

Partner - Executive Partner Glasgow

I am the Executive Partner for Glasgow and a partner specialising primarily in corporate finance but with a strong track record also on sporting matters.